On July 23, Brent crude closed at $100.69 a barrel. A day later, despite fresh threats from President Donald Trump, it settled at $96.78. Four months earlier it had been far higher, and in between it had fallen as low as $71.57.
That swing is the latest chapter of a war that began on February 28, when joint US and Israeli airstrikes hit Iranian leadership and military sites and killed Supreme Leader Ali Khamenei. Iran struck back at US and Israeli targets and at Gulf states hosting American forces. On March 4 it closed the Strait of Hormuz. The International Energy Agency has called the result the “largest supply disruption in the history of the global oil market.”
Asia first in line
Asian economies lean hardest on the strait. China, India, Japan and South Korea take 75% of the oil and 59% of the LNG that leaves the region. Singapore and Taiwan depend more heavily on Qatari gas, while Pakistan and Bangladesh are more sensitive to price. The strait carries about 20% of seaborne crude and LNG exports.
The Philippines declared a state of emergency on March 24, in part because transport workers were on strike at the same time. Zimbabwe, Pakistan, Bangladesh, Nigeria and Vietnam reported severe fuel shortages. Australia and India held enough reserves, but panic buying there created a crisis that one account called “almost entirely man-made.”
Brent rose past $120 after the closure and peaked at $118.35 at the end of March on the closing-price series. QatarEnergy declared force majeure on all exports. Iran hit Qatar’s Ras Laffan complex on March 18, cutting the country’s LNG capacity by 17%. Repairs were put at three to five years, and Asian spot LNG prices jumped by more than 140%.
Gulf and Europe
Inside the Gulf, the effects were sharper. Output from Kuwait, Iraq, Saudi Arabia and the UAE fell by at least 10 million barrels a day by March 12. About 70% of the region’s food imports were disrupted by mid-March, and consumer prices in some places rose 40% to 120%.
Europe went into the crisis with gas storage at an estimated 30% of capacity. Dutch TTF gas prices nearly doubled to over EUR 60 per megawatt-hour by mid-March, and the European Central Bank put off planned rate cuts on March 19.
Prices have eased, with caveats
Tension later cooled, and the shipping index fell from 3,737 in March to 1,850 in July. Some economists argue that modern economies handle oil shocks better than they did in the 1970s. The IMF’s July forecast put world growth at 3% for 2026, saying AI-driven demand offsets much of the supply hit. A Wall Street Journal survey of 74 economists in July gave the US a 25% chance of recession over the next year, down from 33%.
Past shocks have usually faded. After the 1990-91 Gulf War, prices fell within about nine months of the spike, and a $10 to $15 risk premium from the June 2025 war between Israel and Iran vanished within days of the ceasefire.
